Several Trade Reports and an OECD Semi-Annual Outlook

November 9, 2015

The dollar is mostly softer. Stocks are mostly lower, but gold, oil, and some bond yields are up.

The dollar depreciated overnight by 0.4% against the euro and kiwi, 0.3% versus sterling and the Swiss franc, and 0.2% relative to the loonie and Aussie dollar. The U.S. currency, in contrast, rose 0.2% against the yen and 0.1% versus the yuan.

Two stock markets that climbed overnight were in China (+1.6%) and Japan (+2.0%). Other markets lost 1.5% in Indonesia, 0.9% in Hong Kong, 0.8% in South Korea, 0.6% in Taiwan and India, and 0.4% in Singapore and New Zealand. Turning to Europe, markets are down 0.7% in Switzerland, 0.5% in France and 0.4% in Germany and Italy but flat in Britain.

WTI crude oil increased 0.4% to $44.47 per barrel, and Comex gold is 0.3% higher at $1,092.85 per ounce.

The British 10-year gilt yield is three basis points higher, and its Japanese counterpart firmed one basis point.

The latest OECD Outlookprojects world GDP growth at 2.9% this year, improving to 3.3% in 2016 and 3.6% in 2017, and it sees OECD growth of 2.0% in 2015, 2.2% next year and 2.3% in 2017. A fairly steady sequence of U.S. growth of 2.4, 2.5%, and 2.4% is assumed. Chinese growth is expected to continue decelerating from 6.8% in 2015 to 6.5% in 2016 and 6.2% in 2017. Eurozone growth of 1.5%, 1.8% and 1.9% will outpace Japanese growth of 0.6%, 1.0% and finally 0.5%. British growth of 2.4% this year and next and 2.3% in 2017 is projected to be similar to U.S. growth. Canada’s expansion rate accelerates from 1.2% this year to 2.0% in 2016 and 2.3% in 2017.

Chinarecorded a trade surplus of more than $60 billion for a third straight month in October. Compared to a year earlier, imports plunged 18.8%, and exports fell by 6.9%. This was the fourth straight time in which both exports and imports declined in on-year terms.

Germany’s seasonally adjusted trade surplus of EUR 19.4 billion was similar in September to August’s EUR 19.4 billion. The third-quarter average surplus of EUR 20.5 billion was less marginally below the first-half monthly mean of EUR 19.9 billion but above averages of EUR 18.1 billion in 2014 and EUR 15.8 billion in 2013. The unadjusted current account surplus of EUR 25.1 billion was 9.6% wider than the September 2014 surplus, and the year-to-date EUR 176.9 billion surplus surpassed the year-earlier total by 20.3%.

French business sentiment compiled by the Bank of France edged back up to a reading of 98 in October from a six-month low of 97 in September. Such has printed at 98 in 4 of the past 5 months.

Romania’s trade deficit narrowed on month in September, but the year-to-date surplus of EUR 5.5 billion was 28.6% greater than a year earlier.

Hungary’s year-to-date trade surplus of EUR 6.1 billion grew 21.3% compared to a year earlier. Portugal’s 3Q trade deficit of EUR 2.63 billion was 13.5% smaller than a year earlier.

Austria’s trade deficit returned to deficit in August, while Finland’s deficit in September was only EUR 55 million, 72.5% smaller than in August.

Denmark posted a smaller DKK 12.5 billion current account surplus in September, but the DKK 4.8 billion trade surplus was unchanged on month.

The Sentix measure of investor sentiment toward the eurozone improved to a 3-month high of 15.1 in November versus 11.7 in October and 13.6 in September.

Ireland’s construction purchasing managers index rebounded to a 2-month high of 56.8 in October but was still below the 3Q average reading of 57.1.

On-year growth in Japanese labor cash earnings accelerated to 0.6% in September from 0.4% in August but was still lower than 0.9% in the year to July.

Japanese international reserves fell $4.725 billion to 1.244 trillion dollars in October, reversing a $4.786 billion increase in September.

Australian job ads rose only 0.4% in October following gains of 1.3% in August and 3.8% in September.

Dutch industrial production bounced up 0.4% in September after falling 1.6% in August. Greek industrial production posted a 2.8% on-year advance in September, down from 4.1% in August.

Malaysian industrial output was 5.1% greater than a year before in September. Turkish industrial output was flat on month in September, reducing the 12-month rate of increase sharply to 2.8%.

Czech consumer price inflation of 0.2% in October was lower than expected. The CPI was unchanged on month, fooling analysts.

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